How is a sole trader defined?

A sole trader is defined as a business that is owned and operated by a single individual. This structure is characterized by the owner having full control over the business and being personally responsible for all aspects, including profits and liabilities. The simplicity of a sole trader setup makes it an attractive option for many new entrepreneurs, as it requires less bureaucracy compared to other forms of business ownership.

In contrast to a sole trader, other business structures such as partnerships involve multiple owners who share responsibilities and profits. Public limited companies are organizations that can sell shares to the public and are subject to stricter regulations, while corporations with shareholders are more complex entities that involve ownership divided among various shareholders. These other forms emphasize collective ownership and limited liability, which significantly differ from the individual ownership and personal liability seen in a sole trader business model.